HME claims in Round 1 areas plunge

Wednesday, January 18, 2012

WASHINGTON - Claims for home medical equipment in Round 1 competitive bidding areas plunged by as much as 82% in 2011, according to data obtained by Prof. Peter Cramton.

That suggests Medicare beneficiaries in Round 1 are having access issues, according to AAHomecare, which released the numbers in its weekly newsletter.

Cramton, a vocal critic of the program, obtained Medicare claims data through a Freedom of Information Act request. Comparing annualized 2011 claims data to 2010 claims data, he found that HME subject to bidding in Round 1 areas fell by the following percentages:

complex rehab: -82.1%

CPAP devices: -63.7%

diabetes supplies: -74.1% 

enteral nutrition: -65%

hospital beds: -63.7%

oxygen: -61.7%

standard power: -81.5%

support surfaces: -73.8%

walkers: -71.5%

Cramton plans to issue a more detailed analysis soon, according to AAHomecare.

Industry stakeholders, including AAHomecare, have begun alerting lawmakers to these findings.




We have passed the tipping point. Home medical equipment is a cost mitigation tool against higher CMS expenses such as therapy, hospitalization and early admittance to nursing homes. Creating access issues on home medical equipment to this severe degree will hurt the taxpayers.

The next step in the analysis will be to correlate these utilization reductions with increased utilization of thing such as hospitalization related to traumatic falls or respiratory events, outpatient therapy or home health for the same reasons or early nursing home admissions.<br />
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This is how we prove these restrictive policies are penny wise and pound foolish.

I&#39;ve seen the winning bids in these areas and it makes sense. I don&#39;t know how anyone can provide products at these prices. There is no way to cover the payroll and overhead costs at these margins.<br />
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And if you disagree with my statement then ask yourself why utilization went down so much. Does anyone really think a 74.1% reduction in diabetic supply utilzation makes any sense at all? Really?

Any decrease of DME utilization in the home, cooresponding with an increase in hospital admittances/re-admissions in the same MSA, would be damning to CMS&#39;s justification to continue the program. However, my concern is the accuracy of these numbers. How does utilization drop that dramactically! I can&#39;t imagine a Medicare patient needing oxygen, simply doing without. Are they all in Nursing Homes under Part A?<br />
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Perhaps, Is it because billings are being processed by Contractors outside the MSA the patient resides? (example: Pittsburgh residents have bills submitted by winning bidders located in Ohio, New Jersey, California, Florida. 58% of winning bidders were outside of the Pittsburgh MSA.) <br />
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What would get the media&#39;s attention is a significant increase in mortality rates equaling, or, exceeding the mortality rates from, say, smoking. Politicians who continue to support Competitive Bidding with that kind of data would have a hard time making a supportive case in an election year.<br />
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Can&#39;t you hear the pitch "I can reduce the Budget, Entitlement Costs and Taxes if 82% of you patriotic, elderly folks, just do without and die....but vote for me before you go". <br />
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Grab your popcorn, it&#39;s getting exciting.

I&#39;m wondering something else... is the sale of equipment on the wholesale level down these same percentages. Example, has Invacare or Pride also seen lower sales of respiratory or power mobility equipment equal to these numbers?<br />
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If we knew that oxygen equipment sales were down 61% at Invacare or standard powerchairs were down by 81% at Pride or Invacare, then we have some HUGE problems.<br />
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On the other hand, if these companies haven&#39;t seen these types of decreases, how much of the lower claims are due to fraudulent billing where equipment was never delivered in the first place and part of the reduction is because the fraudulent companies aren&#39;t billing in these areas anymore? <br />
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Anybody know how to cross match this type of data?

I know that both Pride and Invacare have layed off a lot of people.

I am not sure I believe the numbers however, I do not doubt utilization has dropped dramaticly. A convergence of CMS making it harder to qualify for items, providers being more careful about providing items they will or may not get paid for and a 90% reduction in providers is creating a serious situation for Medicare patients. I suspect some patients are paying cash and others are just doing without.

I find those numbers very disturbing, although I&#39;m sure CMS is rejoicing.